Cho v. Osaka Zen Spa

Background

So Young Cho brought claims under the Fair Labor Standards Act and New York Labor Law concerning alleged unpaid wages and labor violations during her employment at Osaka Zen Spa. She also alleged disability discrimination, disability-based harassment, religious discrimination, and retaliation under New York State and New York City human-rights laws. The claims at issue in these motions were against Nan Hi Lee, whom the opinion identifies as Namhi Lee, and the discovery dispute involved Namhi and Boksil Paula Lee.

Cho alleged that she worked long hours for low hourly wages, was subjected to insults related to learning and speech disabilities, was forced to attend Bible readings, and experienced other religiously related conduct. She also alleged that she was required to clean Namhi’s medical office without additional pay. Cho claimed that Namhi exercised control over her employment and was one of her bosses.

Namhi moved for judgment on the pleadings under Federal Rule of Civil Procedure 12(c). Cho moved for discovery sanctions under Rule 37, asking the court to bar Namhi and Paula from testifying at trial or submitting affidavits because their depositions had not been completed.

Judgment on the Pleadings

The court declined to consider declarations and exhibits submitted with the parties’ briefing because they were outside the pleadings. It also accepted Namhi’s motion even though it was electronically filed one day after the court’s deadline, in light of her status as a person representing herself and the absence of identified prejudice to Cho.

For the wage claims, the court applied the “economic reality” analysis used to determine whether someone is an employer under the Fair Labor Standards Act and New York Labor Law. The analysis considers factors such as the power to hire and fire, control over work schedules or employment conditions, authority over pay, and maintenance of employment records. The court also considered the possibility of functional control over workers.

The court found that Cho’s allegations largely repeated the legal factors without enough supporting facts. Allegations that Namhi called Cho names, forced her to attend Bible readings, issued unspecified orders, operated under certain professional licenses, or was involved in cleaning Namhi’s medical office did not adequately show that Namhi controlled Cho’s employment or Osaka’s operations. The court therefore concluded that Cho had not pleaded sufficient facts to establish that Namhi was her employer under the federal or New York wage laws.

The court separately addressed Cho’s claims under the New York State Human Rights Law and the New York City Human Rights Law. Because Cho had not adequately alleged that Namhi was an employer, the court considered whether she was sufficiently alleged to be an employee. The court found that Cho’s statement that Namhi was an employee was conclusory and unsupported by additional facts.

The court dismissed without prejudice Cho’s Fair Labor Standards Act, New York Labor Law, New York State Human Rights Law, and New York City Human Rights Law claims against Namhi. The court did not grant Namhi’s request for dismissal with prejudice. It stated that Cho could replead and set July 31, 2024, as the deadline for any Second Amended Complaint.

Discovery Sanctions

The court found that Paula’s deposition had not been completed nearly three years after notice was served, despite an order directing the parties to arrange a remote deposition. Although Paula’s lawyer reported that she had physical injuries and cognitive impairments after a fall, the lawyer did not provide the medical documentation requested by the court. Paula did not oppose Cho’s sanctions motion.

The court concluded that this was a rare case warranting a serious discovery sanction. It found that barring Paula from testifying at trial or submitting affidavits was fair and specifically connected to the failure to complete her deposition. The court therefore granted Cho’s motion as to Paula.

The court denied as moot Cho’s request for sanctions against Namhi because all claims against Namhi had been dismissed without prejudice and Namhi was no longer a party to the case.

Disposition

The court granted Namhi’s motion for judgment on the pleadings. Cho’s claims against Namhi were dismissed without prejudice, and Cho was permitted to replead by July 31, 2024. The court granted in part and denied in part Cho’s motion for discovery sanctions. Paula was barred from providing testimony at trial or submitting affidavits in the case, while sanctions against Namhi were denied as moot. Judge Ramos also directed the parties to appear for a July 24, 2024 status conference and directed the Clerk of Court to terminate the two motions.